Catastrophic Health Insurance

With the rising cost of health care, more people than ever are looking for some form of health insurance that will cover the medical bills in the event of some major illness or injury. Just as the name would imply, catastrophic health insurance is written for just those types of situations. Unlike HMO or PPO policies, catastrophic health insurance doesn’t pay for routine doctor visits, prescription medications or preventative healthcare. Premiums are much lower as a result and consequently, much more affordable.

High Deductible Health Insurance
There are actually several different names by which this type of insurance can be referred to. In the past, catastrophic health insurance was commonly called major medical insurance. Currently it is also referred to as a ‘high deductible insurance plan.’ The reason for this is because there is a tradeoff for those low premiums which is a higher deductible. Since catastrophic health insurance is only used for major medical expenses, a high deductible is nowhere near as high as a single in-hospital stay with major surgery that can even run as high as 6 or 7 figures!

Comprehensive vs. Supplemental Plans
Catastrophic health insurance can be broken down into two basic types which are comprehensive and supplemental coverage. Comprehensive coverage, although still carrying high deductibles and lower premiums, is more like traditional health insurance in some respects. This type of plan will often cover emergency transportation and emergency room services, yet not routine trips to the doctor or any preventative health care. Supplemental high deductible health insurance plans are taken out to supplement other health insurance plans. They help to cover costs that wouldn’t be covered on the primary plan such as nursing or psychiatric care and perhaps medical appliances.

Benefits of Catastrophic Health Insurance
Most often catastrophic health insurance benefits individuals who have jobs that don’t provide a health benefits package as well as those who are self employed. Also, this type of plan is ideal for anyone who doesn’t have a high level of medical needs. If you don’t visit the doctor regularly or are not taking prescription medications on a regular basis, this might be the ideal plan. However, if you are not in optimal health, you might benefit more from a traditional health insurance plan such as an HMO or PPO. The biggest benefit, of course, is the relatively low premiums.

Assessing Whether or Not This is the Ideal Plan
Keep in mind that deductibles are often as high as $5,000 which means that there would be no coverage whatsoever until you paid that amount. If you require ongoing treatment which would require large out-of-pocket payments quite often, you might realize greater benefits from a more comprehensive type of health insurance. Another thing to consider is whether or not you would suffer financial hardships as the result of a major illness/injury. If taken to court to settle high medical bills, how much do you stand to lose?

Ideally, everyone should have some type of health insurance plan that would cover everything from preventative medicine to long term care. Unfortunately, those types of policies are rather expensive which makes them inaccessible to many Americans. The best alternative is to carry catastrophic health insurance that will cover expenses deemed necessary once a high deductible is met. Premiums are based on the amount of the deductible, so a higher deductible yields lower premiums. Also, you might be surprised to learn that prices can vary significantly between insurance companies. To find a plan that is affordable, compare rates between several companies before choosing the plan that meets your needs.

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